Fourth quarter sales in the Americas for Skechers rose 22 percent year-over-year to $925.6 million, fueled by double-digit growth across all channels and improved inventory availability. But higher product costs and planned promotions in the brand’s Direct-To-Consumer business pushed gross margins down by 40 basis points to 48.4 percent. The absence of extraordinary logistics costs coupled with a more normalized distribution network as it relates to efficiency are both expected to drive gross margin higher.

Total Q4 revenues rose 13.5 percent to a record $1.88 billion as wholesale revenues pushed 16 percent higher to $1.05 billion and D-T-C increased 11 percent year-over-year. For FY22, Skechers realized 18 percent revenue growth to $7.4 billion as sales in the Americas increased 22.5 percent, including double-digit improvement in the U.S. The company’s current FY23 outlook calls for a total revenue range of $7.75 to $8.0 billion, slightly below last week’s Street consensus estimate of $8.06 billion.

The company described its FY23 U.S. wholesale business in two parts. The first half is expected to suffer from the challenges of elevated inventory levels downstream that has been impacting order behavior. In H2, meanwhile, Skechers is anticipating its slip-on products and Arch-Fit feature to bolster results as market inventory congestion eases.

The brand reiterated its goal of reaching $10 billion in sales by 2026, noting that the aim is high, but attainable thanks in part to its range of comfort technology products being “broader and more appealing than ever,” and also pointing to new attention-grabbing collaborations planned for the coming year.